President Donald Trump said in a Truth Social post on Tuesday that his administration had reached a deal with Japan, one of the largest U.S. trading partners, to lower its tariff rate to 15% as part of a sweeping trade agreement.
That rate is lower than the 24% that Trump threatened Japan with on April 2 and the 25% that he said he would hit Japanese imports with in a letter on July 7. Before Trump’s current term, the effective U.S. tariff rate on Japanese imports was less than 2%, according to World Bank data.
Japan’s Ministry of Foreign Affairs did not immediately respond to a request for comment about the details of the agreement.
The announcement comes just days before August 1, the latest deadline imposed by Trump on countries to make a deal to avoid tariff rates that Trump himself had set in dozens of letters he fired off on social media. Even though that deadline had been delayed before, Treasury Secretary Scott Bessent said Tuesday on Fox Business Network that it was a “pretty hard deadline.”
Since Trump’s so-called “Liberation Day” on April 2, the administration has yet to strike any formal trade deals, instead signing a handful of framework deals that can be turned into fully-fledged deals later.
Japan has been furiously attempting to avoid as much of a hit from Trump’s global tariffs as possible. Japan’s lead trade negotiator has visited the United States at least eight times, most recently on Monday when he held a more than two-hour meeting with Commerce Secretary Howard Lutnick.
As part of the agreement, Trump said that Japan would “invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits.” It was unclear how an investment of this type would work.
Trump touted the announcement at an event with congressional Republicans later Tuesday, saying that the tariffs “kicked in better than anybody other than me and a few of the people in the room thought could happen.”
Trump added that Japan would be forming a joint venture with the U.S. related to liquified natural gas in Alaska.
Japan was the fifth highest source of U.S. imports in 2024, with American consumers and companies buying nearly $150 billion of goods from the country, according to Commerce Department data.
The talks with Japan came at a tough time politically for Japan’s government. Prime Minister Shigeru Ishiba’s ruling party recently lost both houses of parliament. Ishiba pledged to stay on as leader, in part to address economic headwinds.
Trump had recently downplayed the chances of an agreement with Japan.
“The Japanese are tough, but ultimately you have to understand we’re just going to send a letter saying ‘this is what you’re going to pay, otherwise you don’t have to do business with us’. But there’s a chance,” Trump said on June 16.
In May, Trump approved a long-delayed takeover of U.S. Steel by Japan’s Nippon Steel. As part of that deal, Nippon agreed to create at least 70,000 jobs through a $14 billion investment, according to both companies and the White House. The companies later upped that to 100,000 jobs but clarified that those additions included “direct, indirect, and induced jobs.”
